A Digitimes report states that Microsoft is currently on a aggressive clearance of first generation Surface stocks. Microsoft has attempted to boost sales by dropping the price of its Surface Pro by $100 in North America and dropping the prices of Windows RT tablets very low for consumers as well as even lower for educational establishments where Microsoft is looking to get a foothold. According to Digitimes:

“Weak demand has caused related ODMs to still have about a million units of inventory, waiting to be digested. The sources believe the weak demand is due to Surface Pro’s high price and Surface RT’s poor compatibility.”

Microsoft’s excessively high inventory was the primary reason behind their inventory write-downs of $900 million that they announced after the second quarter results of this year. Just recently Microsoft was taken to court accused of lying about weak Surface sales at the most senior level within the company. Microsoft has now adjusted its sales strategy for the next generation of Surface tablets to avoid such catastrophes again:

“Having experienced the failure of its first-generation Surface, Microsoft is more cautious about its second-generation models and only placed order for about 300,000 units to Pegatron Technology initially, and will increase orders based on the demand, the sources said.”

ASUS, Lenovo and Samsung have already quit producing Surface RT tablets while Dell and Acer are both showing signs of reducing their Windows RT portfolio and maybe even exiting at a later date. The only other Microsoft partner who may be getting involved with Windows RT is Nokia who apparently have a second generation Windows RT tablet on the way.